S&P has raised its long-term rating on Al Rajhi Bank to A+ from A, and has affirmed its A-1 short-term rating.

The ratings agency added that the stable outlook reflects its view that the bank should continue to benefit from its comparative advantage as a leading and well-entrenched Islamic bank in Saudi Arabia and maintain superior financial performance and capital adequacy.

The ratings on ARB reflect its strong capitalisation, resilient and superior profitability, lower concentrations in loans and deposits than peers, and high systemic importance stemming from its large domestic retail franchise, said S&P.

"The stable outlook reflects our expectation that ARB will retain its strong financial profile and leading commercial position in retail banking, despite increasing competition," said Hardy.

Samba Financial

S&P has also upgraded its long-term rating on Samba Financial Group, a top banking products and services provider, to A+ from A and affirmed its A-1 short-term rating. The ratings agency said Samba’s leading commercial position, resilient and solid operating revenue generation, and conservative deleveraging strategy have resulted in a strengthened financial profile.

S&P said the stable outlook reflected its view that Samba should continue to perform well and retain its dominant market position in Saudi Arabia.

“The rating action reflects our view that Samba's financial profile has continued to strengthen, on support from a resilient financial performance, solid capitalization, and strong funding and liquidity indicators," said Hardy.

The ratings agency also considered said Samba benefits from a superior market position in Saudi Arabia and a supportive business mix between retail and corporate banking.